Corporate and union campaign donations still loom large at city hall
Despite a more than six-year ban on corporate and trade union donations in Toronto elections, observers say transparency is still lacking
Thestar.com
April 9, 2016
By Betsy Powell and Jennifer Pagliaro
Toronto city council banned corporate and union campaign donations in 2009 to improve transparency and accountability and reduce the influence of special interests in municipal politics.
“Let’s face it, the amount of money you can raise does have an impact on who gets elected,” then-mayor David Miller said at the time. “If you allow corporate donations, you allow those people, who are a small group, far more impact on the election” than individual citizens.
The Toronto campaign donation model is one toward which the provincial government now appears to be moving, after revelations in the Star about cabinet ministers under pressure to meet fundraising quotas. The province also said this month it will give other municipalities the power to ban special-interest donations, in line with Toronto.
But is Toronto really the place to look to clean up political financing rules?
A Star analysis of campaign donations during the 2014 election revealed big business and special interests continue to loom large at city hall. Despite the ban on corporate and trade union donations, executives and their families, along with union representatives, cut cheques without having to declare their affiliations and have, in several cases, broken limits set by the Municipal Elections Act without investigation or penalty.
The city actually has no power to deal with donors who break the rules, the Star has learned.
Deputy Mayor Denzil Minnan-Wong doesn’t think Toronto sets the best example. Six years ago, he voted against the council-supported ban on money coming from the corporate sector and organized labor.
“It drove transparency and democracy underground by hiding information voters should know,” he says.
“It hasn’t stopped corporations or unions from donating.”
Democracy Watch co-founder Duff Conacher agrees. Instead of corporations being listed on financial filings, those documents now show only the names of people who work for those companies, or other individuals who funnel money to select candidates on behalf of special interests, he says.
Unless political financing rules change, “big money will just continue to corrupt Toronto politics,” Conacher said.
That notion fuels cynicism that it’s not government but wealthy interest groups who are calling the shots - a perception U.S. Republican candidate and business tycoon Donald Trump did little to dispel when he said recently that he donated to politicians because they “do whatever the hell you want them to do.”
While several successful candidates in the 2014 election fundraised primarily from supporters within their own wards, others got a substantial amount of money from elsewhere - including well outside the city's borders. The lines from each councillor's ward trace those donations back to the source - the address provided by the donor.
In 2014, Robert Deluce, president and CEO of Porter Airlines, and his family - including his wife, daughter Justine Deluce, and son and fellow Porter executive Michael Deluce - donated a total of $11,100 to 17 city hall candidates.
Those receiving cheques from the Deluce clan were candidates who had openly supported or were still undecided on lucrative island airport expansion plans pre-2015, before they were scrapped by the new federal Liberal government.
In an interview, Deluce said there was no concerted effort to support candidates who backed his interests or sway decision-making.
But when asked if his donations were purely personal or represented his corporate interests in the airport he said: “A little bit of both.”
“Where they stood on it who even knows, because they never really got to vote on the issue,” Deluce said of councillor support, pointing out that a crucial vote on allowing jets at Billy Bishop Airport never took place.
Deluce, who used to cut cheques clearly marked “Porter Airlines,” agreed that, “In some ways the corporate contributions ... is a little more transparent.” But he said he understands the rationale behind banning them.
Deluce, who gave more than $6,500 in his own name, was one of 13 donors who broke election rules that limit the total donations from one individual to $5,000, according to the Star’s analysis.
The city has no investigative or enforcement powers to penalize donors who over-contribute, the elections office said in an email. Any eligible voter can complain to the compliance audit committee about a candidate who may have broken the rules, but the committee has no power to deal with complaints about donors.
Deluce says he is always conscious of the cap, but in 2014 an accounting error saw a $1,500 cheque from his wife drawn on their joint account mistakenly made in his name.
Stephen Upton also wrote several cheques to council candidates in 2014.
As vice-president of planning and development at Tridel, he donated almost $8,000 to 10 council candidates in his own name, including $1,500 to John Tory’s mayoral campaign. (Upton also broke the election rules. He said he was unaware that it happened. He blames bad math and said he is contacting the city to rectify it.)
Tridel’s three co-founders, brothers Angelo, Elvio and Leo DelZotto, also each gave Tory $2,500, the maximum allowed.
Upton said the donations were unrelated, and the candidates he gave money to were friends he met during his 40 years in the development business.
“I don’t look to do what some people think you do, and that’s buy votes. Not at all,” he said.
When the 2009 ban was enacted, “you had to decide, you know, where do you go from here? And for me it was like very simple: These are people I’ve worked with for years, I’ve known for years, they’re friends and, to me, it was just a good thing to do.”
In 2006, Upton did not donate to any candidate. Elvio DelZotto gave Miller $1,500 and Tridel gave $750 each to incumbent candidates Frances Nunziata and Maria Augimeri.
Another donor, Aubrey Dan, who helped fund Porter Airlines through his Dancap Private Equity Inc. business, argued campaign donations don’t sway anybody. (He also broke the cap at $5,700, but said he did so unintentionally).
“There is no influence at the end of the day ... you can’t buy off a city politician,” he said. “The only thing that you can do to a city politician is make yourself known and they know you, and boy, do they appreciate it.”
It’s not illegal for multiple people connected to a corporation to donate in lockstep, nor is it required that they disclose any of those connections.
“If developers choose to give in their own name, or a family member’s name, there’s nothing wrong with that,” says Robert MacDermid, a York University political science professor and advocate for campaign finance reform.
Union and corporate employees can also volunteer their time to campaigns, which is not monitored.
What Toronto could use is a better disclosure system, several observers argued, one that requires donors to list their employer, occupation and address. The city requires donors only to provide any address they choose.
Minnan-Wong believes the old system of allowing corporate donations was, in fact, “a better system,” which identified to voters which corporations were bankrolling which campaign.
“I would like people to know where the money comes from, and then they can make their own decision,” he said.
When former city councillor John Parker first ran for office in 2006, the majority of his donations came from friends, neighbours and relatives, he said. A small amount of unsolicited money came from the corporate sector.
“The nearest I can make out, there were a number of people who were active in the city hall environment, either lobbyists or lawyers or people who just had an interest in what was going on at city hall,” he says.
It appears they “scanned the landscape, got a look at who was running for office, and sized up the various candidates, and identified the ones they thought merited attention and support.”
That money came with no strings attached - “Never with a letter, a phone call, a tap on the shoulder or anything at all in the nature of ‘We expect you to remember us when we come calling.’ Never.”
Parker says his ear was always open to anyone who had something to say, “whether they donated or not, and I voted as I felt I should vote in each case, after listening to everyone who had something to tell me.”
“The concern that people are buying influence - maybe that happens, I don’t know, I didn’t see it.”
But Conacher says research has shown even small gifts “create a subconscious obligation to return the favor.”
“They will always claim it had no influence at all, but no one can ever prove that unless you can do a Vulcan mind meld.”
Who bankrolled the 2014 municipal election? A look at notable donors
Toronto city council banned corporate and union donations in 2009, but critics say companies and organized labour continued to finance council candidates in the 2014 municipal election. Several notable names from the corporate sector, including family members of executives, appear in the list of donors posted online by the city, without affiliations - which aren’t required under the current rules.
Connections: Tridel
Donated: $15,450 to 10 candidates
Angelo, Elvio and Leo DelZotto, founders of Tridel, the development company synonymous with highrise condo building in Toronto, each donated $2,500 to John Tory’s 2014 mayoral campaign. Stephen Upton, the company’s vice-president of development and planning and former chair of BILD, the building lobby group, who served on Tory’s transition advisory council, wrote cheques totaling $7,950 to 10 candidates, including Tory and fringe candidate Sarah Thomson (for $1,500 each). His donations break a cap set by the Municipal Elections Act that restricts any donor to $5,000 total contributions. Upton said he contributes to the candidates who have become friends over the years, and the money he and the DelZottos donated to Tory were unrelated. “I’ve known people on council for years that I know can use a little bit of help from time to time, to run their campaigns, so I help them along, and that’s really what it is,” he said. He was unaware he spent more than the allowable $5,000 and said he is taking measures to rectify his “bad mathematics.”
Robert Deluce, Michael Deluce & family
Connections: Porter Airlines
Donated: $11,100 to 17 candidates
Airline CEO Robert Deluce donated $6,500 in his own name, breaking the Elections Act cap. His wife, Catherine, chair and founder of luxury realtor Chestnut Park, also donated $2,500 in her own name. Their son, Michael, who is also an executive at Porter, and his wife, Laila, donated $1,500 in their names. And daughter Justine donated $600. Collectively, their money went mainly to candidates seen to be supportive or on the fence about lucrative pre-2014 plans to expand the island airport and allow jets, including Scarborough councillors Norm Kelly and Michelle Holland (formerly Berardinetti). Deluce said he and his family have made no concerted effort to exert influence over council and that exceeding the cap was an accounting error, because a cheque submitted by his wife from their joint account was mistakenly recorded in his name. Michael Deluce said donations from him and his wife were a “personal decision.” “The donations were well within established limits and made transparently through the city's process,” he said. “I favour an open system and support efforts that may enhance this.”
Victor Pappalardo, Antoine Pappalardo & family
Connections: Trans Capital Air
Donated: $18,500 to six candidates
Owners of a charter airline business that also operates out of the island’s Billy Bishop Airport, Victor Pappalardo, son Antoine Pappalardo and their spouses donated the most of any family or other related donors the Star identified. The family mostly donated to identifiably Conservative candidates, including John Tory, Doug Ford and Karen Stintz. Patriarch Victor donated $7,800 in his own name, more than any other single donor, which also exceeded the Elections Act cap. Antoine Pappalardo said the contributions were all “personal” and that his father did not mean to exceed the cap. “We have been definitively advised by city staff that no further action is required on our part,” he said.
Aubrey Dan
Connections: Dancap Private Equity Inc. and Dancap Productions
Donated: $5,700 to 11 candidates
The investor and business owner sits on Porter’s board and provided necessary investment to get it off the ground in 2006. He told the Star he has “a lot of friends,” and donations were made to some councillors, such as Shelley Carroll, who openly opposed Porter’s attempted expansion. Aubrey said he mistakenly exceeded the Elections Act cap. “If you are supportive of a particular councillor, it doesn't guarantee you at all that they’re going to support your position. I mean, you can't buy votes,” he said.
Cary Green, Kevin Green & family
Connections: Greenwin Inc.
Donated: $17,500 to seven candidates
As chairman of the Toronto-based property management company, Cary Green donated a total $6,750 using four different postal codes, which exceeds the Elections Act cap. His wife, Ronda, also donated $3,250. His brother Kevin Green is the president of Greenwin. A Kevin Green and a Lisa Green at the same address donated a total $2,600 to John Tory. Jessica Green heads communications at Greenwin. A Jessica Green also donated $2,500 to Tory. In 2006, when corporate donations were still allowed, Greenwin Property Management donated a total $1,300 to councillors Norm Kelly, Giorgio Mammoliti and Mike Del Grande. In that election, Cary Green donated $2,000 to David Miller and $750 to Shelley Carroll. None of the Greens could be reached for comment.
Alan and Judy Broadbent
Connections: Avana Capital Corporation, Maytree Foundation
Donated: $7,950 to nine candidates
Alan Broadbent, who among many things runs the private investment holding company Avana, donated $6,450, which exceeds the Elections Act cap. All of the candidates he donated to were non-incumbent contenders, including Jane Farrow, Alejandra Bravo and Russ Ford (none of whom were elected). He also donated to Olivia Chow and David Soknacki’s campaigns. His wife, Judy, who co-founded Maytree Foundation with him, also donated $1,500. Broadbent could not be reached for comment as he was travelling out of the province.
Gail and Don Souter
Connections: Beck Taxi
Donated: $7,850 to 10 candidates
Donations from those running one of the city’s largest taxi brokerages, including their daughter and operations manager Kristine Hubbard and her husband, went to John Tory’s campaign and members of the licensing and standards committee during the 2010-2014 term who had been protective of the status quo for the traditional taxi industry. Gail Souter, who is also president of the Toronto Taxi Alliance, previously told the Star it was “outrageous” to think they would know who would be appointed to the licensing committee in the new term or whether any of the previous councillors would be re-elected.
Fred Dominelli
Connections: Self-made businessman
Donated: $10,450 to 26 candidates
Dominelli, who runs a garage on Royal York Rd. and whose local landholdings at one time totaled millions, was briefly appointed as a city councillor for Davenport in 2003 when the previous councillor left. He had run unsuccessfully in previous elections. Before that he reportedly bought up expensive tracts of land vital to city redevelopment interests, causing a stir at council. “Whatever piece of property you can buy, buy it,” he told the Star in 2000. He spent the most money in his own name of those the Star identified, breaking the Elections Act cap. He could not be reached for comment.
Barry Campbell, Paul Brown and Chris Holz
Connections: Campbell Strategies
Donated: $9,063 to 12 candidates
A majority of those leading the strategy firm show up individually as donors on the city-posted list, including Barry Campbell ($3,300), Paul Brown - a strategist on Karen Stintz’s failed mayoral campaign - ($4,100), and Chris Holz ($1,663). Their website says: “We treat our network of government, media, and regulatory leaders as relationships, not just connections. Our reputation is based on the right ask, at the right time, of the right people, with the right message.” Brown told the Star they donated as individuals, including to longshot candidates, not for any corporate or client interests. As a part of Stintz’s team, Brown said he only asked Campbell to support his candidate.
Wayne Squibb & family
Connections: Realstar Group
Donated: $12,500 to one candidate
The president and CEO of the real estate investment company, which also manages multiple rental properties and motels in Toronto, donated the maximum $2,500 to John Tory’s campaign, as did four family members listed at the same postal code. Squibb did not respond to requests for comment.
Citizens for a Progressive Toronto
Connections: Various unions
Donated: $2,400
Union representative Mark Rowlinson, assistant to the national director of United Steelworkers, contributed $1,500 to Olivia Chow’s mayoral campaign and another $500 to council candidate Joe Cressy. Jenny Ahn, assistant to the national president of Unifor, cut cheques to Chow for $200 and councillor Paula Fletcher for $200. Six weeks before the 2014 election, Ahn and Rowlinson were part of a group that incorporated Citizens for a Progressive Toronto, who produced an advertisement as a third party accusing mayoral candidate John Tory of being “out of touch” with Torontonians when he suggested young women learn to play golf to help them get ahead in their careers. When trade unions were still allowed to donate in 2006, the Steelworkers union gave four donations totaling $1,250 to a candidate who lost. Ahn, who was working for Canadian Auto Workers at the time, donated $500 to David Miller’s re-election campaign and another $500 to a candidate who failed to win, in her own name. Both Rowlinson and Ahn said their donations were personal, to candidates who have represented parts of Toronto where they live or whose politics they support. Both said their unions had nothing to do with their decisions. “Me donating has nothing to do with my union ... it’s my own money,” Ahn said.
Data analysis contributed by Matthew Cole
Possible solutions for transparency
Advocates calling for revamped political financing rules, including Democracy Watch’s country-wide Money in Politics campaign, recommend key changes to help let the public know who is bankrolling their elected officials. Co-founder Duff Conacher talked to the Star about what should change at the municipal level:
- Donation limits should be significantly lowered from Toronto’s limits of $750 for councillor candidates and $2,500 for mayoral candidates to something like $100 and $200 to prevent those who can afford to donate large amounts from exerting influence over preferential candidates. “With the $100 donation limit you generally solve all of that because you have to involve a whole bunch of people to make a significant donation,” Conacher said.
- To make up campaign funds, the city should match every dollar donated up to between $100,000 and $200,000 for all candidates, what Conacher said would “level the playing field” because the amount of money matched will largely depend on how many supports a candidate has, not how much money they have. Public money is already refunded to donors through a rebate program, but it would allow that money to be used more fairly, he said. “A huge amount of taxpayer money is handed out to the wealthy because they get half their large donation back,” Conacher said.
- Candidates should disclose the identity of each individual donor’s employer, as they do in the U.S., as well as reveal each donor’s direct organizational affiliations, including whether they sit on any boards, to help ensure corporations, unions and other organizations are not funneling donations through their employees or board members.
- Create spending limits and force disclosure for individuals or interest groups acting as third parties who provide paid-for advertising for candidates, which Conacher said Toronto doesn’t do currently. He said cities could see an increase in third-party support if individual donation limits are lowered.
